Youi Australia’s strong performance has contributed to South African parent Outsurance Holdings’ “pleasing” result in the six months to December 31.

The Australian operation’s headline earnings of $20 million for the half-year were in contrast to Youi New Zealand’s $7 million loss.

Outsurance’s profit for the period was 783 million rand ($67 million).

Youi Group – which operates in Australia and New Zealand – comprises 49% of Outsurance’s revenue and 12% of its profitability.

Youi New Zealand was launched in August 2014, and Outsurance says its performance is “in line with expectations”.

The Kiwi operation’s “start-up loss” of 70 million rand ($6 million) “compares favourably to the 85 million rand ($7.3 million) loss of the immediately preceding six months”.

The strong Australian result is attributed to an increased underwriting margin, “which benefitted from relatively benign weather conditions and a notable improvement in cost efficiency”.

Youi Group gross written premium (GWP) grew 26%, more than triple the GWP growth of 7.3% for Outsurance in South Africa and exceeding overall group GWP growth of 17.6%.

Youi Australia’s GWP for the December half was $344 million, and New Zealand’s $14 million.

“Youi Australia’s market share of the domestic vehicle and home markets continues to expand as new business volumes are sustained,” Outsurance says.

The Australian business’ combined operating ratio moved to 91.3% in the half-year from 98.2% in the corresponding period of 2014, driven by an improvement in claims and the cost-to-income ratio.

“Claims repair and replacement costs in Australia have been subject to inflationary pressures as a result of the weaker Australian dollar against major currencies,” Outsurance says.

“Youi Australia’s claims ratio continues to outperform the industry experience.”